McCulloch v. Fox & Jacobs, Inc. ( 1985 )

SPARLING, Justice.

Appellant, Andrew McCulloch, appeals a summary judgment disposing of his causes of action for damages against defendant/appellee, Fox & Jacobs, Inc. McCul-loch contends, inter alia, that the court erred by finding that the summary judgment evidence established as a matter of law that TEX.REV. ClV.STAT.ANN. art. 5536a (Vernon Supp.1985) immunized Fox & Jacobs from liability. Alternatively, McCulloch argues that if the statute does in fact protect Fox & Jacobs, it unconstitutionally denies him equal protection of the laws, due process of law, and access to the courts. We disagree with all contentions and, accordingly, affirm.

Summary judgment is proper only if the pleadings, depositions, affidavits, and admissions in the record establish that no genuine issue of material fact exists and that the movant is entitled to relief as a matter of law. TEX.R.CIV.P. 166-A(c); McFadden v. American United Life Insurance Co., 658 S.W.2d 147, 148 (Tex.1983); Wesson v. Jefferson Savings & Loan Association, 641 S.W.2d 903, 904-05 (Tex.1982). In reviewing the propriety of a summary judgment, we accept as true the nonmovant’s version of the facts adduced through the summary judgment proof and indulge every reasonable intendment in the non-movant’s favor. Nelson v. Krusen, 678 S.W.2d 918, 919 (Tex.1984); Williams v. Bennett, 610 S.W.2d 144, 145 (Tex.1980); Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972).

From approximately 1960 to 1966, Fox & Jacobs, a developer and builder of residential single-family homes, developed and constructed the Greenwood Hills community. In addition to planning and building houses, Fox & Jacobs, in 1961, contracted for the construction of a swimming pool which it conveyed to the Greenwood Hills Community Club as part of a community package to attract persons to reside in the development.

On July 13, 1979, McCulloch dove into the shallow end of the pool and severed his spinal cord, suffering severe injuries and incurring substantial expenses for which he seeks reparation from Fox & Jacobs. McCulloch alleges that Fox & Jacobs negligently failed to warn him of a dangerous condition, failed properly to inspect the swimming pool, and failed to provide adequate lighting at the pool. Additionally, McCulloch alleges a cause of action in strict liability, charging that the defective design of the pool rendered it unreasonably dangerous and that Fox & Jacobs failed to provide sufficient markings of the depth of the pool or otherwise warn of the danger. Finally, McCulloch argues that Fox & Jacobs breached warranties of merchantability and fitness for intended purpose.

In its motion for summary judgment, Fox & Jacobs contended that article 5536a barred each and every alleged cause of action. Article 5536a provides, in pertinent part:

Section 1. There shall be commenced and prosecuted within ten years after the substantial completion of any improvement to real property ..., and not afterward, all actions or suits in court for damages for any injury ... or unsafe condition of any such real property ... or improvement attached to such real property against any registered or licensed engineer or architect in this state performing or furnishing the design, planning, inspection of construction of any such improvement, equipment or structure or against any such person so performing or furnishing such design, planning, inspection of construction of any such improvement, equipment, or structure;

Section 2. There shall be commenced and prosecuted within ten years after the substantial completion of any improvement to real property, and not afterward, all actions or suits in court for damages for any injury ... to a person ... arising out of the defective or unsafe condition of any such real property or any deficiency in the construction ... of any improvements on such real property against any person performing or furnishing construction ... of any such improvement_ [Emphasis added.]

The parties do not dispute that the pool constituted an “improvement” within the meaning of the statute. McCulloch argues, however, that the express language evinces a legislative intent to limit the liability of persons involved in the actual construction of improvements to real property and that Fox & Jacobs was merely a residential developer. Fox & Jacobs counters that, as supervisor of the project, it was sufficiently involved in the construction process to merit the protection of the statute.

The cardinal rule of statutory construction is to ascertain the intent of the legislature and to give effect to that intent. Knight v. International Harvester Credit Corp., 627 S.W.2d 382, 384 (Tex.1982); State v. Terrell, 588 S.W.2d 784, 786 (Tex.1979); Minton v. Frank, 545 S.W.2d 442, 445 (Tex.1976). The legislative intent is determined through scrutiny of the statute in its entirety, rather than through study of isolated portions. Taylor v. Firemen’s & Policemen’s Civil Service Commission, 616 S.W.2d 187, 190 (Tex.1981); Citizen’s Bank of Bryan v. First State Bank, 580 S.W.2d 344, 347, 348 (Tex.1979); City of Mason v. West Texas Utilities Co., 150 Tex. 18, 237 S.W.2d 273, 278 (1951). If the statute is clear and unambiguous, extrinsic aids and rules of construction are inappropriate, and words should be given their common, everyday meaning. Cail v. Service Motors, Inc., 660 S.W.2d 814, 815 (Tex.1983); Minton, 545 S.W.2d at 445; Railroad Commission of Texas v. Miller, 434 S.W.2d 670, 672 (Tex.1968). A reviewing court, however, is not confined to the literal meaning of the words used but must consider that which is implied as well as that which is express. Citizen’s Bank, 580 S.W.2d at 348; Austin Road Co. v. Evans, 499 S.W.2d 194, 203 (Tex.Civ.App. — Fort Worth 1973, writ ref’d n.r.e.). Since article 5536a is curative or remedial, Hill v. Forrest and Cotton, Inc., 555 S.W.2d 145, 149 (Tex.Civ.App. — Eastland 1977, writ ref’d n.r.e.), it should be given a comprehensive and liberal construction rather than a technical construction which would defeat the purpose motivating its enactment. City of Mason, 237 S.W.2d at 280. Finally, a statute should be given a reasonable interpretation to avoid injustice or absurd consequences. Gulf Insurance Co. v. James, 143 Tex. 424, 185 S.W.2d 966, 969 (1945); State Highway Department v. Gorham, 139 Tex. 361, 162 S.W.2d 934, 936 (1942); Alvarado v. Gonzales, 552 S.W.2d 539, 542 (Tex.Civ.App. — Corpus Christi 1977, no writ).

Applicability of Article 5536a

Applying the admonition in Hill, 555 S.W.2d at 149, that article 5536a is to be given “the most comprehensive and liberal construction possible,” we conclude that the statute protects Fox & Jacobs. Although Fox & Jacobs clearly was not a registered or licensed engineer or architect and, consequently, not protected by section 1, see Ellerbe v. Otis Elevator Co., 618 S.W.2d 870, 872 (Tex.Civ.App.—Houston [1st Dist.] 1981, writ ref’d n.r.e.), appeal dismissed, 459 U.S. 802, 103 S.Ct. 24, 74 L.Ed.2d 39, reh’g denied, 459 U.S. 1059, 103 S.Ct. 478, 74 L.Ed.2d 625 (1982), the exclusion of engineers and architects in section 1 guides our construction of the phrase “any person performing or furnishing construction ... of any improvement” used in section 2.¹

The statute was intended to apply to litigation against architects, engineers, and others involved in designing, planning or inspecting improvements to real property, as distinguished from materialmen and suppliers and from tenants and owners who possess or control the property. See Thompson, When the Walls Come Tumbling Down — Article 5536(a): The Texas Architect and Engineer Statute of Limitation, Texas Trial Lawyers Forum (October-December 1983). Thus, the critical inquiry is whether Fox & Jacobs’ role in constructing the pool was more analogous to that of a builder or to an owner or supplier.

Fox & Jacobs fashioned general guidelines and hired a professional land developer to designate the location of the pool and create a conceptual layout. Although the guidelines did not specify dimensions, Fox & Jacobs approved the approximate dimensions selected by the land planner. A professional engineer under contract with Fox & Jacobs designed the pool, and approval by Fox & Jacobs of the final specifications was an indispensable prerequisite to construction of the facility. Fox & Jacobs solicited bids and hired a contractor to perform the actual construction. Fox & Jacobs supervised the construction process, inspected the pool upon completion, and found the workmanship “satisfactory.”

Thus, although Fox & Jacobs did not design or construct the pool and although Fox & Jacobs was the nominal owner of the pool at the time of construction, the summary judgment evidence establishes that Fox & Jacobs never intended to maintain possession or control of the facility. Fox & Jacobs intended to and did convey the pool to the Homeowners Association to attract prospective buyers to purchase property in the development. Thus, with respect to building the pool, Fox & Jacobs functioned not as an owner but as a builder or supervisor. By furnishing money, planners, engineers, and subcontractors for the construction of the pool, and by performing supervisory and inspection duties, Fox & Jacobs functioned as a “person performing or furnishing construction ... of ... [an] improvement.”

Our holding is consistent with prior case law broadly construing the statute. In Hill v. Forrest and Cotton, Inc., 555 S.W.2d 145, 149 (Tex.Civ.App. — Eastland 1977, writ ref d n.r.e.), the court held that registered engineers operating as a corporation were amenable to the benefits of the statute. In Ellerbe, 618 S.W.2d at 872, the court held that the manufacturer of an elevator was a person performing or furnishing construction even though it did not install the elevator in the building. In Skeen v. Monsanto Co., 569 F.Supp. 232, 233 (S.D.Tex.1983), the court held that the plain language of the statute manifests a legislative intention to include within its purview persons who design, plan, or inspect improvements to real property.

The dissent champions McCulloch’s argument that each cause of action is predicated on the conveyance of the pool rather than on its construction. The same argument could be made anytime to defeat the protection of article 5536a: an architect sells his plans, an engineer his design, and a homebuilder his house. We hold that the immunity afforded by article 5536a may not be abolished by plaintiffs suing for “conveyance.” Further, the Fifth Circuit in Brown v. M.W. Kellogg Co., 743 F.2d 265, 268 (5th Cir.1984), held that the sale of technology or concepts constitutes designing, planning, or constructing an improvement to real property:

This interpretation urged by appellants is a narrow technical one which, if accepted, would render the statute effectively meaningless, for it is the ideas and concepts of engineers and the technology incorporating them, which, upon embodiment in construction, make their services valuable.

Accordingly, we hold that the summary judgment evidence establishes as a matter of law that article 5536a bars commencement and prosecution of each of McCul-loch’s causes of action.

Constitutionality

McCulloch argues that article 5536a violates federal and state due process and equal protection clauses and the Texas open courts provision. We do not agree. We follow our sister courts of appeal and reject McCulloch’s due process and equal protection challenges raised under the state constitution. Sowders v. M.W. Kellogg Co., 663 S.W.2d 644, 648-49 (Tex.App.— Houston [1st Dist.] 1983, writ ref’d n.r.e.); Ellerbe v. Otis Elevator Co., 618 S.W.2d 870, 873 (Tex.Civ.App. — Houston [1st Dist.] 1981, writ ref’d n.r.e.), appeal dismissed for want of substantial federal question, 459 U.S. 802, 103 S.Ct. 24, 74 L.Ed.2d 39 (1982); Hill v. Forrest and Cotton, Inc., 555 S.W.2d 145, 149 (Tex.Civ.App. — Eastland 1977, writ ref’d n.r.e.). See Annot., 25 A.L.R.4th 641 (1983); Annot. 93 A.L.R.3d 1242 (1979).

In Ellerbe, the court of appeals rejected plaintiff’s arguments that the statute violated federal due process and equal protection provisions, and the Texas supreme court dismissed the writ with the notation “no reversible error.” The United States Supreme Court dismissed the case for want of a substantial federal question, a decision on the merits binding this court. Hicks v. Miranda, 422 U.S. 332, 344, 95 S.Ct. 2281, 2289, 45 L.Ed.2d 223 (1975). See Hasty v. Rust Engineering Co., 726 F.2d 1068, 1070 (5th Cir.1984). Accordingly, we overrule all points of error alleging deprivation of substantive due process of law or denial of equal protection of the law.

Finally, McCulloch argues that article 5536a violates the open courts provision of the Texas Constitution: “All courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law.” TEX.CONST. art. I, § 13. McCulloch contends that article 5536a unconstitutionally divests him of a cognizable cause of action because it bars a remedy before an injury is sustained, discovered, or reasonably could have been discovered. We disagree.

A statute is presumed valid: “It is to be presumed that the Legislature has not acted unreasonably or arbitrarily; and a mere difference of opinion, where reasonable minds could differ, is not a sufficient basis for striking down legislation as arbitrary or unreasonable.” Sax v. Votteler, 648 S.W.2d 661, 664 (Tex.1983), quoting Smith v. Davis, 426 S.W.2d 827, 831 (Tex.1968). See also McGowan v. Maryland, 366 U.S. 420, 425-26, 81 S.Ct. 1101, 1104-1105, 6 L.Ed.2d 393 (1961); County of Cameron v. Wilson, 160 Tex. 25, 326 S.W.2d 162, 165 (1959). The burden of demonstrating invalidity rests on the party assailing the statute. Robinson v. Hill, 507 S.W.2d 521, 524 (1974); Smith v. Craddick, 471 S.W.2d 375, 378 (1971).

The open courts provision is a facet of due process and ensures that Texas citizens bringing a common law cause of action will not unreasonably be denied access to the courts. Nelson v. Krusen, 678 S.W.2d 918, 922 (Tex.1984); Sax, 648 S.W.2d at 664; Hanks v. City of Port Arthur, 121 Tex. 202, 48 S.W.2d 944, 945 (1932). The section does not create new rights but is a “declaration of a general fundamental principle that for such wrongs as are recognized by the law of the land, the courts shall be open and afford a remedy.” Ellerbe, 618 S.W.2d at 873; In the Interest of B M N, a child, 570 S.W.2d 493, 498 (Tex.Civ.App. — Texarkana 1978, no writ).

A statute that unreasonably abridges a justiciable right to obtain redress for injuries caused by wrongful acts of another is void as violative of the open courts provision. Sax, 648 S.W.2d at 665. The right to bring a well-established common-law cause of action cannot be abrogated by the legislature absent a showing that the legislative basis for the statute outweighs the denial of a constitutionally guaranteed right of redress. 648 S.W.2d at 665-66. Thus, an aggrieved litigant must show that a cognizable common-law cause of action is being restricted and that the restriction, balanced against the purpose of the statute, is unreasonable or arbitrary. 648 S.W.2d at 666.

Article 5536a, a statute of repose, represents a legislative response to the inadequacy of traditional statutes of limitation. Sowders v. M.W. Kellogg Co., 663 S.W.2d 644, 647 (Tex.App. — Houston [1st Dist.] 1983, writ ref’d n.r.e.). The time period begins to run when the improvement is substantially completed rather than when the cause of action accrues or is discovered. Although the parties apparently agree that granting repose to construction professionals is a permissible objective, they disagree as to whether the means adopted is rationally related to the objective.

McCulloch argues, first, that article 5536a is inherently defective because it is not, like a statute of limitation, a procedural remedy but a substantive deprivation of his right to redress. We disagree. A cause of action does not vest until an injury occurs; no one has a vested right in any common-law rule, and the right to bring a common-law action is not a fundamental right. Regents of the University of California v. Hartford Accident and Indemnity Co., 131 Cal.Rptr. 112 (Ct.App.1976); Dague v. Piper Aircraft Corp., 275 Ind. 520, 418 N.E.2d 207, 213 (1981). Thus, the legislature may create new rights or abolish old ones to attain a permissible legislative objective. Silver v. Silver, 280 U.S. 117, 122, 50 S.Ct. 57, 58, 74 L.Ed. 221 (1929); Sowders, 663 S.W.2d at 648; Ellerbe, 618 S.W.2d at 873; Rosenberg v. Town of North Bergen, 61 N.J. 190, 293 A.2d 662, 667 (1972); Freezer Storage, 476 Pa. 270, 382 A.2d 715, 718 (1978). No one “has a vested right in the continued existence of an immutable body of ... law_ [T]he practical result of a [contrary] conclusion would be stagnation of the law in the face of changing societal conditions.” Freezer Storage, 382 A.2d at 720, quoting Singer v. Sheppard, 464 Pa. 387, 346 A.2d 897, 903 (1975).

To determine whether the legislative purpose outweighs interests protected by the constitutionally guaranteed right of redress, we consider the general purpose of the statute and the extent to which the litigant’s right to redress is affected. Sax, 648 S.W.2d at 666. See also Harrison v. Schrader, 569 S.W.2d 822, 827 (Tenn.1978). The statute demonstrates legislative recognition of the protracted and extensive vulnerability to lawsuit of architects, engineers, and others within its purview. Harrison, 569 S.W.2d at 827. As a result of judicial erosion of the privity of contract defense and judicial adoption of the discovery rule for accrual of a cause of action, construction professionals are subjected to expanded liability and, consequently, escalation of insurance rates. Cudahy Co. v. Ragnar Benson, Inc., 514 F.Supp. 1212, 1217 (D.Colo.1981); Rosenberg v. Town of North Bergen, 61 N.J. 190, 293 A.2d 662, 664-66 (1972); 18 Cath.U.L.Rev. 361 (1969).

Further, the construction professional exercises little, if any, control over the property once the construction is complete. Unlike landowners or possessors who can avoid liability by caring for the premises and regulating conditions of entry onto the land, the construction professional has no right to enter to inspect the premises. Additionally, as time passes, records are lost or disposed of, witnesses die or move away, and proof of causation becomes more difficult. The possibility of third-party neglect, abuse, poor maintenance, mishandling, improper modification, or unskilled repair increases. See, e.g. Cudahy Co., 514 F.Supp. at 1217; Burmaster v. Gravity Drainage District No. 2, 366 So.2d 1381 (La.1978); Anderson v. Fred Wagner & Roy Anderson, Jr., Inc., 402 So.2d 320, 324 (Miss.1981); Freezer Storage, Inc. v. Armstrong Cork Co., 476 Pa. 270, 382 A.2d 715, 718 (1978). Thus, balancing the legislative purpose against individual interests, we conclude that the ten-year ceiling is a reasonable means of addressing these issues and of enabling construction professionals and their insurance carriers to calculate probable liability without unreasonably compromising the right of an injured party to bring a cause of action. See Hawkins v. D & J Press Co., Inc., 527 F.Supp. 386, 389 (E.D.Tenn.1981).

In Nelson v. Krusen, 678 S.W.2d 918 (Tex.1984) (on motion for rehearing), the supreme court held that the statute of limitations for actions arising out of medical malpractice, TEX.INS.CODE ANN. art. 5.82, § 4 (repealed) (current version at TEX.REV.CIV.STAT.ANN. art. 4590i, § 10.01) (Vernon Supp.1985),² was unconstitutional as violative of the open courts provision to the extent that it abrogated a cause of action before the plaintiff knew or could have known of any injury. Although the court used broad language, it expressly reaffirmed the Sax balancing test. Krusen, 678 S.W.2d at 922.

Further, the facts of the instant case are distinguishable from Krusen. First, as noted in Nelson v. Metallic — Braden Building Co., No. 01-85-0029-CV (Tex.App. — Houston [1st Dist.], May 23, 1985) (not yet reported), article 5536a does not vitiate appellant’s right to redress for injuries sustained because appellant may have a viable claim for damages against the owner or lessee or operator of the swimming pool. Secondly, the medical malpractice provision addressed in Krusen was a typical statute of limitations, barring actions not filed within two years of the breach or tort or the date of the medical treatment or hospitalization regardless of the date of discovery. The court held that the statute unconstitutionally barred a vested right of action. McCulloch, on the other hand, sustained injuries after the expiration of the statutory period. Further, the ten-year limit is substantially more protective of individual rights than the two-year limit held unconstitutional in Krusen. Consequently, we hold, consistently with Sax and Krusen, that article 5536a does not violate the open courts provision. Accordingly, we overrule all points of error and affirm.

GUITTARD, C.J., and AKIN, CARVER, VANCE, ALLEN, WHITHAM, MA-LONEY, DEVANY and McCLUNG, JJ., join in the majority opinion. GUILLOT, J., dissents, joined by HOWELL, J. STEPHENS, J., not participating.

1 . Section 1 was approved on June 2, 1969, effective September 1, 1969. Limitation of Actions Against Architects and Engineers, ch. 418, § 1, 1969 Tex.Gen.Laws, Local & Spec. 1379. Section 2 was added May 20, 1975, effective September 1, 1975. Limitations — Improvements to Real Property, ch. 269, § 1, 1975 Tex.Gen.Laws, Local & Spec. 649.

2 . Act of June 3, 1975, ch. 330, § 1, 1975 Tex. Gen.Laws, Local and Spec. 864, repealed by Medical Liability and Insurance Improvement Act, ch. 817, pt. 4, § 41.03, 1977 Tex.Gen.Laws, Local and Spec. 2039, 2064.